Issue 192 of daily comments: the two cities closed down again, and the infrastructure sector warmed up

Market review: the index opened low and went low, led by the building decoration sector

Today, the Shanghai and Shenzhen index opened low and went low. As of the close, the Shanghai index fell 0.25% to 3586.08 and the Shenzhen index fell 0.66% to 14429.51. In terms of sectors, architectural decoration, building materials and steel led the increase, while beauty care, media and food and beverage led the decline. The turnover of the two cities was 1136.68 billion yuan, a contraction of 12.91% over the previous trading day and an increase of 0.65% over the average of the previous five days. Shanghai Stock connect sold a net 2.217 billion yuan, Shenzhen Stock connect sold a net 4.421 billion yuan, and northbound funds sold a net 6.638 billion yuan throughout the day.

Market focus:

According to the minutes of the Fed meeting, participants pointed out that considering the economic, labor market and inflation prospects, it may be necessary to raise the federal funds rate in advance or faster than previously expected. If the economic outlook changes, the committee should continue to be prepared to adjust the rate of debt purchase. Many officials said that the shrinking speed could be faster than that of the previous cycle. The emergence of Omicron strain makes the economic outlook more uncertain, but it is not believed that it will fundamentally change the path of U.S. economic recovery.

Strategy suggestion: focus on the required consumption segment

Today, the two markets continued to explore slightly. The Shanghai and Shenzhen index fluctuated downward after opening low in the morning and warmed up in the afternoon. The market turnover fell to around 1.1 trillion yuan. The northward capital ended the net inflow on the 7th and continued to flow out throughout the day. At the macro-economic level, the minutes of the Federal Reserve meeting released hawkish signals, driving the decline of US stocks across the board. Under the expectation of raising interest rates and opening the table contraction in advance, there was a significant outflow of funds from the north, which dragged down the performance of the A-share market. At present, the recovery of global liquidity in 2022 has basically become the consensus expectation of the market, but there are still disputes about the pace and timing of tightening. We believe that the Fed's current interest rate hike is highly urgent, and we do not rule out the possibility of the first interest rate hike in the second quarter, and the interval between table contraction and interest rate hike will be significantly shortened (the interval between table contraction and the first interest rate hike in the last round of tightening cycle is about two years), but the probability of three interest rate hikes and table contraction within the year is still small. On the one hand, the urgency of tightening lies in that inflation has dampened the real purchasing power of American residents and constrained American economic growth, and the role of easing policy in improving the distortion of the labor market has been very limited; On the other hand, under the environment of lower mining costs dragging down the energy price center, the space for further price increase of "core push" energy has been relatively limited. It is also a probability event that OPEC + will gradually start the production increase cycle in 2022. At the same time, although it is difficult to completely alleviate the supply chain tension under the impact of port aging and epidemic, it is expected to gradually improve under the adaptive operation of continuous realization of maritime transport capacity and regional production and inventory adjustment. The tightening policy is no different from a dose of "poison" to the rising asset prices in the United States. The quarterly easing of inflationary pressure can give the federal reserve some policy space, In order to avoid the huge fluctuation of the market caused by too fast pace.

In terms of sectors, we believe that under the current environment of great downward pressure on China's economy and strong uncertainty in overseas markets, the mandatory consumer sector with strong risk aversion and low valuation seems to be aggressive and defensive, with better allocation and cost performance. We suggest paying attention to it.

Risk tip: the macro-economy is less than expected, the national epidemic situation is more than expected, and the geopolitical risk is intensified.

 

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